I am acutely aware that pubs have faced considerable challenges during the coronavirus pandemic, and that the economic effects of fighting the virus will last longer for businesses than the duration of any restrictions. I am therefore encouraged that they have been provided with significant financial support and relief. Throughout the pandemic, pubs have benefitted from a range of grants such as the one-off Restart Grants which were made available to help businesses reopen safely, worth up to £18,000 for hospitality, leisure, accommodation, personal care and gym businesses. The reduced VAT rate of 12.5 per cent and option to defer some VAT payments until March 2022 are continuing to support businesses, as is the UK-wide Recovery Loan Scheme which has been extended until June 2022.
Announcements made in the 2021 Spending Review will directly help to support pubs as they adapt and recover from the pandemic, with a five per cent cut to duty rates on beer and cider. I am told that this is the biggest cut to these duties in 50 years and almost 100 years, respectively. The hospitality industry will also benefit from frozen alcohol duty rates which will continue from 2021-22 into 2022-23.
Expanding on the business rates holiday introduced in response the pandemic and the 66 per cent relief which remains in place for 2021-22, a new relief will be introduced for eligible retail, hospitality and leisure properties. This will see over 90 per cent of retail, hospitality and leisure businesses receive at least 50 per cent off their business rates bills in 2022-23.
As announced in the 2021 Spending Review, a new small producer relief will be introduced for cidermakers and other producers of lower ABV drinks. This will allow small producers to diversify their product range to other products below 8.5 per cent ABV while still benefitting from reduced rates.
Looking to the future, I welcome the fact that the Government’s long-term strategy for the hospitality sector includes an extension to pavement licences, making it easier and cheaper for pubs, restaurants and cafes to continue to make outdoor dining a reality with seating, tables and street stalls to serve food and drinks. There is also an intention to make these licences permanent. On top of this, pubs will be given more flexibility through a 12-month extension of temporary permissions for the off-sale of alcohol.
Evidence continues to be collected on the impact of the pandemic on the hospitality sector and I am glad that the Government’s support is continuing to help pubs, which are the lifeblood of our communities, to recover and build back better.